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Staff Benefits » HSA

HSA

1st Source Bank

1st Source Bank:  219-762-2165
2020 H S A Form
HSA Education 

HSA Basics
A health savings account (HSA) is a tax-advantaged checking account that gives you the ability to save for future medical expenses or pay current ones. It is individually owned; however, you may elect to designate an authorized signer who may also withdrawal funds and be issued a debit card.

HSA Eligibility
To be eligible to make deposits to an HSA, you:
• Must be currently enrolled in an HSA-qualified health plan;
• May not be enrolled in any other non-HSA
Qualified health plan;
• May not have, or be eligible to use, a general purpose flexible spending account (FSA);
• Cannot be claimed as a dependent on another person’s tax return;
• May not be enrolled in Medicare, Medicaid, or Tricare;
• Must not have used VA benefits for anything other than preventative services in the past three months.

Contributions to your HSA
The annual maximum allowable contributions to an
HSA, as established by the IRS, for 2020 are:
• Individual: $3,550
• Family: $7,100
Individuals 55 and older can make an additional catch-up contribution of $1,000 in 2020. A married couple can make two catch-up contributions if both spouses are eligible. The spouses must deposit the catch-up contributions into separate accounts.
The annual maximum contribution is based on a calendar year and there is no limit to the dollar balance that can build in the account over time. Contributions can come from:
• Employee pre-tax payroll withholding
• Employer contributions (non-taxable income)
• Individual contributions from account owner or other individual (tax-deductible for account holder)
• IRA or Roth IRA rollover

Distributions from your HSA
• You, or an authorized signer, can make withdrawals (or distributions) for qualified expenses.
• Distributions from your HSA can be made by check, debit card, ATM, online bill payment or by in-person request.
• Distributions for qualified medical expenses are tax free.
• Distributions made for anything other than qualified medical expenses are subject to IRS tax plus a 20% penalty. The penalty is waived if the account owner is 65 or older, or due to death or disability.
• Qualified medical expenses for your spouse and your tax dependents’ may be paid from your HSA, even if those individuals are not covered under your high-deductible   health plan (HDHP).
• You’re responsible for keeping receipts for all distributions from your HSA. The bank does not monitor how the funds are spent.

Allowable Expenses
To be a qualified medical expense, the expense has to be primarily for the diagnosis, cure, mitigation, treatment or prevention of disease. It must be to alleviate or prevent a physical or mental defect or illness. These expenses may or may not apply to your insurance deductible depending on the coverage provided by your medical plan. Vision and dental expenses, such as glasses, contact lenses, eye exams, dental cleanings and orthodontia are all allowable expenses from your HSA. Medical supplies such as Band-Aids, crutches, test strips and even contact solution are allowable as well. Insurance premiums only under the following  circumstances: while receiving federal or state unemployment  benefits, COBRA premiums, qualified  long-term  care insurance premiums and Medicare and other health care premiums after age 65 (with the exception of Medicare supplement policies such as Medigap).
Examples of Allowable Expenses:

 
• Acupuncture
• Alcoholism Treatment
• Ambulance
• Bandages
• Birth Control Pills
• Breast Reconstruction
• Car Hand Controls (for disability)
• Chiropractors
• Christian Science Practitioners
• Contact Lenses
• Crutches
• Dental Treatment
• Dermatologist
• Diagnostic Devices
• Disabled Dependent Care Expenses
• Drug Addiction Treatment (inpatient)
• Eyeglasses
• Fertility Enhancement
• Guide Dog
• Gynecologist
• Hearing Aids
• Home Care
• Hospital Services
• Laboratory Fees
• LASIK Surgery
• Lodging (for out-patient treatment)
• Long-Term Care
• Meals (associated with receiving treatments)
• Medicare Deductibles
• Nursing Care
• Nursing Homes
• Obstetrician
• Operations
• Ophthalmologist
• Optician
• Optometrist
• Organ Transplant (including donor’s expenses)
• Orthodontia
• Orthopedist
• Over-the-Counter Medications
(If prescribed)
• Oxygen and Equipment
• Pediatrician
• Personal Care Services
(Chronically ill)
• Podiatrist
• Prenatal Care
• Prescription Drugs
• Prescription Medicines
• Prosthesis
• Psychiatric Care
• Qualified Long-Term Care Services
• Smoking Cessation Programs
• Surgeon/Surgical Room Costs
• Therapy
• Transportation Expenses for Health
Care Treatment
• Vaccines
• Vitamins (if prescribed)
• Weight Loss Programs (certain expenses if diagnosed by physician)
• Wheelchair
• Wig (for hair loss from disease)
• X-Rays 

Non-Allowable Expenses
Insurance premiums are not eligible expenses (exceptions listed above).
Costs associated with non-medically necessary treatments are not eligible. This includes cosmetic surgery and items meant to improve one’s general health (but which are not due to a specific injury, illness or disease) such as health club dues, gym memberships, vitamins and nutritional supplements.
Over-the-counter medications are not eligible unless you obtain a prescription from a doctor. The prescription is not required for purchase; however, retain it for your records in the event it is required by the IRS.
Examples of Non-Allowable Expenses:
• Advance Payment for Future
Medical Expenses
• Automobile Insurance Premium
• Baby-sitting (healthy children)
• Commuting Expenses for the
Disabled
• Controlled Substances
• Cosmetics and Hygiene Products
• Diaper Service
• Domestic Help
• Electrolysis (hair removal)
• Funeral Expenses
• Hair Transplant
• Health Club and Gym Memberships
• Household Help
• Illegal Operations and Treatments
• Illegally Procured Drugs
• Maternity Clothes
• Non-Prescription Medicines
(as of January 1, 2011)
• Nutritional Supplements
• Premiums for Accident Insurance
• Premiums for HSA Qualified
Health Plan (prior to age 65)
• Premiums for Life or Disability
Insurance
• Scientology Counseling
• Teeth Whitening
• Travel for General Health
Improvement
• Tuition in a Particular School for Problem